Lagos — Nigeria’s three refineries, the Port Harcourt, Warri and Kaduna refineries, posted a trading deficit of N80.276 billion in nine months, from January to September 2020, according to data released by the Nigerian National Petroleum Corporation (NNPC).
In its Monthly Financial and Operations Report, the NNPC stated that the woeful performance of the refineries was, however, an improvement from the deficit of N111.535 billion recorded in the same period in 2019.
Specifically, the NNPC noted that the three refining companies posted revenue of N7.054 billion in the nine-month period of 2020, dropping by 89.74 per cent from N68.767 billion recorded in the same period in 2019; while expenditures stood at N87.33 billion, a 51.56 per cent decline compared to expenditures of N180.302 billion recorded in the nine-month period of 2019.
On a company-by-company basis, the NNPC report stated that Kaduna Refining and Petrochemical Company (KRPC) posted revenue of N6.698 billion in the nine-month period of 2020, expenditure of N35.821 billion and a trading deficit of N29.123 billion.
Port Harcourt Refining Company (PHRC) declared a trading deficit of N27.402 billion, hinged on a revenue of N63 million and expenditure of N27.465 billion; while Warri Refining and Petrochemical Company (WRPC), posted revenue of N294 million, expenditure of N24.045 billion and trading deficit of N23.751 billion.
On a month-by-month basis, the NNPC reported that in January, February, March, April and May 2020, the three refineries recorded combined operating deficit of N9.6 billion, N9.36 billion, N10.3 billion, N9.69 billion and N9.55 billion; while for June, July, August and September 2020, the refineries posted a combined operating deficit of N10.23 billion, N9.05 billion, N7.09 billion and N5.4 billion.
The NNPC explained that in September 2020, the three refineries processed no crude and combined yield efficiency was 0.00 per cent, owing largely to on-going rehabilitation works in the refineries.
It said: “The declining operational performance is attributable to ongoing revamping of the refineries, which is expected to further enhance capacity utilization once completed.
“The Corporation has been adopting a Merchant Plant Refineries Business Model since January 2017. The model takes cognizance of the products worth and crude costs. The combined value of output by the three refineries (at Import Parity Price) for the month of September 2020 amounted to approximately N0.52 billion.
“No associated crude plus freight cost for the three refineries since there was no production but operational expenses amounted to N5.92 billion. This resulted to an operating deficit of N5.40 billion by the refineries.”